REDUCING MARKET DISTORTIONS FOR A MORE PROSPEROUS UKRAINE 39 TABLE 3 Policy Recommendations Short term Medium term Responsible institutions Legal / Regulatory Recommendations Adopt rules requiring business sepa- MEDT/ SPF/AMCU ration in vertically integrated SOE, and mandate that SOEs earn rates of return comparable to private-sector operators Develop and revise regulatory frame- CMU/Ministry of Infrastructure / NCSRCI/ works for the use of unlicensed AMCU spectrum, telecom licensing and authorization, and sharing mobile- telecom infrastructure Revise regulations that protect CMU/Ministry of Infrastructure/AMCU/ incumbents, including SOEs (e.g., in the other government agencies transportation sector) Upgrade competition rules to explicitly AMCU/CMU prohibit cartels and increase legal certainty and predictability Develop comprehensive rules for state aid AMCU/CMU Implementation / Enforcement Recommendations Mandate the disclosure of SOE MEDT/SPF/line ministries performance information, including AMCU the costs associated with commercial and non-commercial activities Unbundle vertically integrated SOEs CMU (e.g., in the gas and electricity sectors) Ministry of Infrastructure Enforce rules against cartel behavior and AMCU penalties for violating the Competition Law Develop a registry of state-aid recipients Review tax exemptions and other AMCU/MEDT/ Ministry of Finance /other forms of state aid and align them with line ministries regulations Prioritize pro-competition public AMCU/MEDT procurement processes Institutional Recommendations Ensure the independence of sectoral CMU/Ministry of Infrastructure/other regulators to avoid con昀氀icts of interest government agencies between policy objectives and SOE incentives (e.g., in the transportation and telecom sectors) Strengthen the AMCU’s institutional CMU/AMCU guarantees and provide it with the necessary resources to ful昀椀ll its mandate